Q1 2024 Update: Continued Media Attention on Payer-Provider Disputes
The first quarter of 2024 was eventful for the healthcare and life sciences industry. It was marked by significant disruptions related to the Change Healthcare cyberattack, multiple government spending deadlines, and more—all building upon the existing complex financial, operational, and regulatory environment for payers and providers alike.[1],[2] The new year has also brought more stories on contract negotiations between payers and providers and how the breakdown of these negotiations impacts the patients and families caught in the middle of them.
Over the last two years, FTI Consulting has been closely tracking how negotiations between payers and providers over reimbursement rates and other contractual terms have been unfolding in the public through news coverage as well as paid and earned media. These negotiations have often drawn a response from local officials, state and federal lawmakers, and regulators, too.
Last year, our research found that there was a significant increase in media coverage of payer-provider rate negotiations in 2023, with dramatic increases in the first half of the year compared to the first half of 2022.[3],[4],[5]
This year, our research shows that the number of disputes reported in the first quarter of 2024 was slightly higher than those reported during the same period in 2023. The following highlights our Q1 2024 findings.
What we found: Q1 of 2024 brought a slight increase in media coverage of reimbursement rate negotiations compared to Q1 of 2023.
Q1 2024 Healthcare Quarter in Review
- In Q1 2024, at least 20 disputes became public and were covered in the media, demonstrating a slight increase from 19 disputes in Q1 2023.
- 50% of the disputes that became public in Q1 2024 failed to reach a timely agreement, placing hundreds of thousands of patients out-of-network for some period of time. This is a significant increase from the 26% that failed to reach an agreement during the same time frame last year.
- Of the 20 disputes reported in the media in Q1 2024, 50% (10 disputes) involved MA plans. This is down 24% compared to Q1 2023. Of the 10 disputes involving MA plans, only three of these disputes were exclusively focused on MA plans.
“OON” stands for “Out of Network.”
While the number of disputes reported in the media appears to have plateaued relative to the marked increase in 2023, it appears that the number of individuals and families losing in-network coverage for some period of time is on the rise, which will likely result in increased media attention and greater scrutiny and involvement from government officials and regulators.
As we look to the rest of 2024, we should anticipate that continued pressures – rising care delivery and staffing costs, increased use of utilization management such as prior authorization, and a greater focus on quality improvement, care coordination and whole-person care – will continue to impact contract negotiations and the relationship between payers and providers. These issues and more promise to bring continued attention to these high-stakes and sensitive disputes.
Research Methodology:
FTI Consulting searched multiple news databases for articles regarding negotiations over reimbursement rates between provider organizations and insurance companies. Those negotiations, which were publicly reported by a news outlet on January 1 or later, were counted for the year in which they were publicly reported. Negotiations that were resolved or failed to reach an agreement in one year but were first reported in another year were counted for the year in which they became public. Where providers no longer accept any Medicare Advantage plans, FTI Consulting has counted that decision as a single dispute.
[1] Tina Reed, “Change Healthcare attack sheds light on industry’s weak points,” Axios (April 8, 2024), https://www.axios.com/2024/04/08/change-healthcare-hack-defense
[2] Barbara Sprunt, “Congress unveils final spending package, as Friday midnight deadline looms,” NPR (March 21, 2024), https://www.npr.org/2024/03/21/1239671594/congress-unveils-final-spending-package-as-friday-midnight-deadline-looms
[3] Adam Broder, Citseko Staples Miller, Sophia Setterberg, Michael Adeyanju, Nicole Labkoff, Merzulie Gregoire, Paula Gutierrez, “Media Coverage of Payer-Provider Disputes Jumps 260% in Q1,” FTI Consulting, Inc. (May 1, 2023), https://fticommunications.com/media-coverage-of-payer-provider-disputes-jumps-260-in-q1/?topic_origin=healthcare-life-sciences
[4] Adam Broder, Citseko Staples Miller, Paula Gutierrez, “Local News Outlets Continue to Highlight Increasingly Common Payer-Provider Disputes,” FTI Consulting, Inc. (July 25, 2023), https://fticommunications.com/local-news-outlets-continue-to-highlight-increasingly-common-payer-provider-disputes/?topic_origin=healthcare-life-sciences
[5] Citseko Staples Miller, Paula Gutierrez, Annika Chauhan, “End of Year Update: Payer-Provider Disputes in the Public Eye in 2023,” FTI Consulting, Inc. (January 16, 2024), https://fticommunications.com/end-of-year-update-payer-provider-disputes-in-the-public-eye-in-2023/
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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